In-house lawyers’ salaries have fallen in value over the past two years with average pay increases running below inflation, new figures show today.

Salaries rose by 2.7% in the year to September 2012, according to research by Incomes Data Services (IDS). Over the same period, inflation averaged 3.7%. In the previous year salaries grew by 2.8% against inflation of 5%.

However, the research claims that while in-house salaries ‘remain subdued’, there are ‘positive signs’ that the number of employers imposing pay freezes on in-house lawyers is falling, with freezes among heads of legal dropping to just 13% of those surveyed, down from 20% last year.

The research adds that benefit packages continue to be attractive, with company cars, car allowances, private medical insurance and pensions commonly offered.

Median salaries, the research says, now range from £48,273 for solicitors up to £122,604 for heads of legal.

IDS principal researcher Nasreen Rahman said: ‘Businesses have been keeping a tight rein on staffing costs since the recession and pay growth for support staff, even for in-house lawyers, has been sluggish.

‘However, increasing demand for in-house legal counsel has offered some relief over the last year. An increasing number of organisations are now looking to bolster their in-house legal teams by bringing specialist talent in-house in order to reduce their reliance on external counsel.

‘In-house lawyers may miss out on the larger bonuses, salaries and profit shares on offer in private practice law firms but they are willing to trade this off for a better work-life balance with more regular working hours.’

The IDS survey was based on 82 companies employing a total of 1,351 qualified in-house lawyers in September 2012.